The objectives for the O2 funding period was to examine factors regulating lung glycolysis and to examine patterns of lactate utilization in the lung. The activity of Hexokinase (HK) averaged 2.4 U/g fresh lung and the activity of Phosphofructokinase (PFK) was 2.0 U/g fresh lung. Lung HK and PFK activities were not influenced in rats made diabetic by streptozotocin. Lactate utilization into lung fatty acids were examined in a perfused lung preparation containing 3H2O and (14C) labeled precursors. Total rate, measured by the incorporation into fatty acids of 3H from 3H2O averaged 8-10 micro mol.g dry wt-1.h-1. Over 50% of the newly synthesized fatty acids appeared in lung phospholipids. Lungs perfused with (U-14C) lactate and (U-14C) glucose showed that circulating lactate constitutes a significant carbon source for newly synthesized fatty acids.